The nation’s leading wedding retailer is flirting with the possibility of bankruptcy protection, which often involves some store closures, after skipping a key debt payment.

David’s Bridal, whose tight grip on the wedding business has loosened in recent years amid digital competition and declining marriage rates, failed to make a key loan payment Monday.

That move served as a warning to creditors that the company is barreling toward a restructuring effort of some kind. Failing to make a debt payment is often a precursor to filing for Chapter 11 bankruptcy protection.

There’s a “very high likelihood” of bankruptcy or a consensual debt restructuring for David’s Bridal, said Mathew Christy, an S&P Global Ratings analyst who tracks the retailer.

S&P Global Ratings on Tuesday lowered David’s Bridal’s credit rating from CCC-, which suggests the borrower is vulnerable to not paying back its debts on time, to SD, which indicates the company has selectively defaulted on a debt obligation but plans to continue making payments.

To be sure, David’s Bridal said it voluntarily skipped the payment as it continues to negotiate a potential restructuring deal with its creditors. That means it has the financial wherewithal to make the payment.

The company has a 30-day grace period to pay up, though S&P said it’s “highly likely” that won’t happen.

“Our financial outlook is strong and we have ample liquidity to meet our key business objectives today and in the future,” David’s Bridal said Thursday in a statement. “With the assistance of our financial and legal advisors, we are engaged in discussions with our lenders in order to reach a mutually agreed upon resolution designed to strengthen our balance sheet so we can increase our financial flexibility and further invest in our business.”

The problem is that the long run, the company’s debt compared with its revenue is “unsustainable,” Christy said.

David’s Bridal still sells about one in three U.S. wedding dresses through its more than 300 stores and website, with estimated annual retail revenue of $791 million, according to market research firm IBISWorld.

David’s Bridal

The company is turning a profit before interest, taxes and debt payments, but it has too much debt stemming from its 2012 acquisition for more than $1 billion by private equity firm Clayton, Dubilier & Rice.

Ratings agency Moody’s ranked David’s Bridal among retailers that could default on their debts or file for bankruptcy protection in 2018.

While the company’s sales are likely strong enough to keep it in business, bankruptcy would raise the serious prospect that David’s Bridal could be poised to close some stores.

David’s Bridal has at least 10 stores in Illinois, including one in Chicago.

Retailers often choose to shed unprofitable leases through bankruptcy.

David’s Bridal has been left at the altar by brides who are increasingly buying gowns online, choosing alternatives, waiting longer to get married or not getting married at all. Online sales at sites like Floravere, Anomalie and BHLDN have intensified competition.

The average price paid for a wedding dress fell 3.5 percent from 2016 to 2017, according to wedding site TheKnot.com.

The number of new marriages per 1,000 Americans was 6.9 in 2016, down from 8.2 in 2000, according to the U.S. government.

“As brides are looking to either pare back their wedding expenses or spend less on gowns, that has led to a decline in spending on wedding dresses or destination weddings and having smaller weddings,” Christy said.